Federal Reserve Governor Christopher Waller said on Tuesday that he is confident that monetary policy is positioned to slow the economy and get inflation back to 2%.
In a speech at the American Enterprise Institute, Waller added that the labor market is cooling off, but still tight. Regarding the outlook, he considers that supply-side problems are mostly behind.
“I cannot say for sure whether the FOMC has done enough to achieve price stability. Hopefully, the data we receive over the next couple of months will help answer that question”, Waller said.
Key takeaways:
While I am encouraged by the early signs of moderating economic activity in the fourth quarter based on the data in hand, inflation is still too high, and it is too early to say whether the slowing we are seeing will be sustained.
I am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2 percent.
Data on economic activity in October indicate that consumer spending is cooling from its pace in the third quarter.
The labor market is also cooling off. Job creation is down this year from the high rates of 2022, and the unemployment rate has risen from a more than 50-year low of 3.4 percent in April to 3.9 percent in October.
These are all signs of a loosening labor market. But for all of the measures I have mentioned, they are still at levels that, historically, would be associated with a fairly tight labor market.
The October data I have cited on economic activity and inflation are consistent with the kind of moderating demand and easing price pressure that will help move inflation back to 2 percent, and I will be looking to see that confirmed in upcoming data releases.
Before the next FOMC meeting we will get data on PCE inflation and job openings, and a job report and supply manager's survey for November.
All of that data will tell us whether inflation and aggregate demand are continuing to move in the right direction and inflation is on a path to our 2 percent goal.
Market reaction
The US Dollar Index remains in negative territory, trading below 103.00 at the weakest level since August.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats to 1.0950 area as safe-haven flows dominate markets
EUR/USD loses its traction and declines to the 1.0950 area following a recovery attempt earlier in the day. The risk-averse market atmosphere makes it difficult for the pair to hold its ground as investors grow increasingly concerned over a deepening trade war weighing on global economic activity.
GBP/USD drops to fresh monthly low, tests 1.2800
GBP/USD stays under persistent bearish pressure in the European session on Monday and trades at its lowest level in a month near 1.2800. The intense flight-to-safety remains the main market theme after US President Donald Trump's tariffs triggered a global trade war last week.
Gold price holds above $3,000 amid a global meltdown; bulls seem non-committed
Gold price attracts some sellers near the $3,055 support-turned-resistance and stalls its intraday recovery from the $2,972-2,971 area, or a nearly four-week low touched earlier this Monday. Investors continue to unwind their bullish positions to cover losses from a broader meltdown across the global financial markets
Solana Price Forecast: Bears gain momentum as SOL falls below $100
Solana (SOL) extends its loss by over 7% and falls below the $100 mark at the time of writing on Monday after crashing 15.15% last week. Coinglass data shows that SOL’s leveraged traders wiped out nearly $70 million in liquidations in the last 24 hours.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.